INSTITUTIONAL RELATIONS

COMMITMENT TO SOCIETY

Institutional Relations are part of Euskaltel’s idiosyncrasy, which applies the commitment to the market and proximity as the philosophy in the relations with all interest groups. As such, every year Euskaltel carries out a Society Survey in order to subject its activity to social examination on the internal and external level, so as to find out how the market values its activity beyond the customer-provider relationship.

Sponsorship is another formula for social commitment to the customers, the subscribers and society in general. Here sport is a key element in Euskaltel’s commitment and in 2007 it has been present in cycling, Basque pelota, mountaineering and surfing.

Euskaltel’s participation in the fiestas of the three Basque capitals has been particularly relevant in the International Firework Festivals. It has not only been involved in the fiestas from the most ludic point of view, but also encouraging, from responsibility, participation in sustainable fiestas. Other initiatives have been extended into the family ambit, like supporting the Large Families; the Garbide programme to promote respect for the environment from the pedagogical ambit between parents- educational centres-children and the Euskera () fiestas (, , and Nafarroa Oinez.

Internally Euskaltel has promoted an inventory of associations and entities in which the employees altruistically take an active part. As a result, it has implemented policies in favour of disabled people, corporate volunteer policies and actions which take the internal commitment to Society.

Institutional Relations

Since Euskaltel joined the market ten years ago not a single day has gone by without contacting one of the institutions which represent and interact with the Basque market.

In 2007, for management efficiency reasons and based on criteria of excellence, we have identified the activity on a departmental level, recognising the criticalness and importance of “doing it properly”, raising it to the same category as the sponsorship activities or Euskaltel’s foundational activity.

We understand that the public relations in themselves generate a level of credibility and reaffirm what is said. It is the most natural and direct way for transferring messages, objectives, business challenges, strategy and brand interests. There are therefore many activities performed within this area.

All of this is united by integrated management which draws together the synergies between operative marketing, advertising, sponsorship, public relations, the institutional activity and communication, and culminates in producing greater coherency in the messages sent to the market and a more homogenous and concentrated brand image. “Euskaltel es para ti” (Euskaltel is for you) seeks to become a reality and not just a marketing slogan. This has been a management objective and during 2007 two fronts have materialised; organisational and operative.

Institutional Activity

Both the institutional activity and the public relations go together in Euskaltel. In 2007 Euskaltel prepared an external communication calendar in order to measure the frequency of “noise and news intensity”. Within this forecast of landmarks are the institutional visits. These visits took place at Euskaltel’s headquarters twice every month. Their aim is to maintain a permanent line of communication with the key institutions, companies and entities for the development of our business activity. It is also an objective to be the top reporter to our interest groups. Nobody can report about “us” better than ourselves, without external interpretation and coming from the “horse’s mouth”.

Apart from this initiative of company rapprochement, every year Euskaltel performs a Society Survey in order to subject our internal and external activity to public examination. We are interested in finding out how the market values us beyond the customer-supplier relation. We want to find out what we provide to the development of the local economy, if our environmental work (recycling mobile phones, reducing energy and paper consumption, making better use of hardware) is valued by society. We want to know if we are recognised as a committed company, which respects the use of Euskera (Basque language), which is present at social, cultural and sports events and activities, which communicates and listens. All of this brought us to measure ourselves, establishing more and more ambitious indicators and challenging ourselves to achieve them.

Together with this Society Survey, during 2007 Euskaltel also interviewed a group of eighty social leaders with the aim of finding out finer qualitative aspects and is then able to adjust the day-to-day management based on their impressions.

Without forgetting that Euskaltel participates in a great number of initiatives with the institutions in order to promote activities of public interest, as well as others which although younger provide new values in the three territories.

Every step with the institutions is a step of commitment for us. This has been the same since we started ten years ago.

Sponsorship

Sponsorship is another formula for social commitment where our customers, our subscribers and society in general get to know us, and see in these activities an operator’s point of reversion to society in the most mercantile sense of the word.

There are many initiatives which take place in the territories in which we operate and it is never easy to select those that best coincide with our values.

The fact is that sport has always been a key element in our sponsorship activity. We understand this and we are strongly committed to Country specific initiatives like cycling, Basque pelota, mountaineering and surfing.

Young People

During 2007 we have extended the scope of the sponsorship repositioning our activity towards the younger public. The pro surf in Zarautz, the Billabong Pro in Mundaka, are risky commitment in which we have felt identified and responded to.

One of our classic sponsorship activities is Euskaltel’s presence at the fiestas in the three capital where we contribute both economically and with our presence, where we are active in the juries for the International Firework Festivals.

Not only are we involved in the fiestas from the most ludic point of view, but also encouraging, from responsibility, participation in the sustainable fiestas. Thus in Vitoria-Gasteiz we collaborate in glass recycling campaigns during the fiestas and in Donostia-San Sebastian promoting the use of bicycles during those days of pedestrian and traffic saturation.

Family Ambit

Other family orientated initiatives are the fiestas in favour of Large Families, the Garbide programme to encourage respect for the environment from the pedagogical ambit between parents-educational centres- children, the fiestas in favour of Euskera (Basque language) which we support at the four annual encounters (Ibilaldia, Kilometroak, Araba Euskaraz and Nafarroa Oinez) and collaborations like that with EHIGE

(Parents Association of Euskal Herria – the Basque Country), to encourage responsible use of the technologies.

There are also the children’s stories competitions for school children, the support for regulated walks or local initiatives, which are a sample of our many activities for the “general public”.

Sports

Apart from the repositioning activities that we explained above (surf, sailing), there are other activities that Euskaltel has been developing for quite a while and which are now a social reference. Like for example the “Marea Naranja” (Orange Tide), which has gone from the Pyrenees to summer and there are many people waiting with anticipation for the new design of the T-shirt that we give away every year. 2007 saw a significant change to our T-shirt. We eliminated our corporate trademark, but not the now well-know “Euskaltel orange”, placing festive elements in the design, we increased the range of sizes, we placed colourful elements on the sleeves and collars and we use ecological silk screen painting. An example of how the classic can be innovated year after year with the aim of pleasing the fans and everyone who wants to use it.

Apart from cycling we maintain our presence at pelota courts extending our scope of interest into Navarra, where Euskaltel now operates since 2007 with the mobile telephone product.

And we must not forget races which are becoming increasingly popular. The -Bilbao, the Behobia-San Sebastián, the Donostia Marathon, the Herri Krosa in Bilbao, the Igorre Ciclocros and many others, where we are present in one way or another.

Social

We must not overlook our presence at social events and acts in support of those must in need. At Euskaltel we have internally promoted an inventory of associations and entities in which our employees altruistically take an active part. And from these Euskaltel prioritises from amongst the requests. We have already implemented policies in favour of disabled persons and corporate volunteer policies, actions which clearly transfer the internal commitment to the Society.

EUSKALTEL FOUNDATION

2007 saw the activity of the Euskaltel Foundation adapt in order to place it in line with the current phase of the Euskaltel project, as stated in the objectives of the 2008-2010 Strategic Plan. Hence it was decided to bring the Sponsorship activity previously performed by the Foundation to Euskaltel. The Foundation will be devoted to carrying out projects which help to fulfil its Mission of “promoting activities of technological research, study and development, developing the widest range of access possibilities for all citizens to the global information and communication society and contributing towards progress and expansion of its cultural formation, preferably in the fields of telecommunications and audiovisuals”. During this year of transition, it performed the following programme of activities.

Training Actions Amongst the training-related actions performed this year, we should highlight the creation of the Eskola project in the Euskaltel Foundation.

Eskola Euskaltel came into being with the aim of integral management of the Training that Euskaltel gives all of its Groups of Interest, from the Distribution Network to the Customers or the Market in general, transferring knowledge existing in Euskaltel to the aforementioned groups.

Eskola Euskaltel is a challenging project for the Euskaltel Foundation, both due to its objective of providing value to the Community, and due to the quality standards that are set for its training activity.

In Eskola Euskaltel, ATIRA and ACOPRE (training for installers and sales representatives) have given courses for 120 installers and 100 sales representatives. It has also prepared the training diagnosis for the coming year which is summarised as follows: 51 people for the residential sales, 153 people for company sales, 256 bus installers and 54 maintenance installers.

European Projects: Family, television and internet

During 2007 two parallel actions have been developed relating to Corporate Social Responsibility linked to the use of technology:

On the one hand and together with EHIGE (Parents Association of the Basque Country) and the Basque Government Department of Education certain bases have been established for the collaboration in relation to education in the use of the technologies. Apart from perfecting the support for distribution in CD-Rom and facilitating the distribution to the classrooms, the edition of new guides and supports were planned on guidelines for Internet surfing, Internet use within the family, and pedagogy in the school centres.

Additionally, and in order to update the details that have been used about the Internet habits of children and adolescent in the CAPV, other regions and internationally, an ambitious comparative study has been coordinated with the University of the Basque Country on the most frequent activities developed on the Internet by these groups.

The objective of this project is to protect the children and young people guaranteeing safer use of the network, and providing the parents with a tool that they can use to create a safer environment.

Institutional Activity

The activities corresponding to belonging to the Board of the Guggenheim Foundation, Kursaal and Artium were carried out. Collaboration was maintained with the Quincena Musical (Music Fortnight) and sponsorship of the Telecommunications Night in the Basque Country, Telekogaua. A framework agreement was agreed with the University of the Basque Country which will soon materialise in a framework agreement between the two entities relating to the following: disability, R+D projects (relating to digital homes and companies) and sharing instruments and knowledge.

Euskal Encounter 15

This audiovisual design, technology and aesthetics meeting repeated its media success and attendance this year. We had the presence of the Vicelehendakari (Vice-President) of the Basque Government and the difficult challenge was achieved of increasing the number of those attending and visiting the previous year.

As an experiment, collaboration was set up with Saiatu, Gureak and Lantegi Batuak for what Euskaltel calls the disability challenge, which is an initiative in favour of overcoming any access barrier to the technology. A stand was placed in the exhibition area simulating different disabilities in order to see and feel the difficulties that these groups have on a daily basis in their relations with technology.

At the same time the transfer was organised of people with disabilities to this Meeting in an attempt to overcome this “digital divide” which exists in our society. We consider leisure and technology to be something that must be accessible without exclusions, and this is one of the objectives of the Euskaltel Foundation.

Gamezone Project

Gamezone is an “amateur” single-station and network videogame competition, with consoles and computers where the participants can test their teamwork skills, competitiveness and reflexes. It is sponsored by the Euskaltel Foundation in Vitoria-Gasteiz, in collaboration with the City Council. The objective is to cover a leisure aspect providing technology, encouraging the most fun and youthful version of technology.

Gipuzkoa Encounter

2007 the Encounter was organised for the first time in Tolosa. This event is similar to the Euskal Encounter but on a smaller scale, with the objective of positioning Euskaltel with the message of quality and service in the new technologies in the territory of Gipuzkoa.

Etsedi Project

Part of its work to integrate accessibility to the technology for those with different degrees of disability. Work is being performed on Euskaltel products and their usability by this group, including the following products: decoders, web, special remote control for interactive television, mobile telephones, etc. The challenge is to continue consolidating adapted Euskaltel products.

Promotion of Euskera (Basque language)

During 2007 within the linguistic policy project, the future bases have been prepared in order to be accredited by the Lan Hitz certification promoted by the Basque Government. Euskaltel has collaborated together with eight other entities in order to design the evaluation criteria for compliance with the indicators relating to the application and practice of effective linguistic policies. Thanks to this voluntary collaboration the Basque Government has granted Euskaltel recognition for the work performed, in order to start up this new certification method in favour of Euskera (Basque language). Furthermore, and together with this pioneering initiative in the CAPV, the bases have been set, together with the Basque Government, in order to start a pilot plan for encouraging the use of Euskera in the Euskaltel shops.

Social Project

2007 has seen progress in the following aspects: 1) The first Corporate Social Responsibility plan. The plan contains compliance indicators and specific actions in different areas of the company. 2) The first draft to generate a corporate volunteer plan. 3) The regularisation process has been started for the social integration law for disabled persons and its resulting application to the selection and training processes. 4) Social actions have been maintained. As a result of this work Euskaltel has received recognition from Cáritas Diocesanas as an “Empresa con corazón” (Company with a Heart), for its consistent work in favour of a sustainable and fairer society.